Saturday, June 22, 2019
Tuesday, June 4, 2019
Cleaning up the mess
Anyone who spends time on the back roads of the oil patch
has seen them, the rusting hulks of old pumpjacks and tank batteries moldering
in the middle of a cow pasture. Whenever I see one, I can’t help wondering how
many there are and what the impact of them is, besides just pure ugliness.
Abandoned Wells are
Bad News
Americans have been drilling for oil since 1859. There are over
1 million active oil wells today. By law, oil well operators are required to plug
wells and remediate sites when the well outlives its life-span, but if an
operator goes out of business, wells are simply abandoned. Also, many older wells
(pre-1950s) may be inadequately plugged or simply forgotten due to poor or lost
documentation. How many abandoned wells are there? Nobody really knows, but
estimates are maybe as many as a million in the U.S.
Besides aesthetics, are these abandoned oil wells a problem?
After all, cattle graze next to them. People plant gardens around them. They are
a common part of the landscape in many states. Some of the impacts of abandoned
wells:
- Groundwater contamination – oil, gas, or saltwater contamination of aquifers.
- Methane emissions – approximately 40% of abandoned wells leak methane. Methane is a significant contributor to global warming and can be very dangerous locally, even causing explosions.
- Surface environment/surface water – old, rusting equipment and site debris can pose a risk to wildlife and people; oil, gas, saltwater, or drilling mud ooze to the surface and contaminate surface water and soil. For example, in Imperial, Texas, a “lake” of salty, sulfurous water created by effluence from abandoned wells literally kills all vegetation within 30 feet.
- Abandoned wells in fracking zones – fracking fluids can be pushed into abandoned wells, compromising the fracking well and even resulting in toxic geysers.
Fixing the Problem
So, what’s to be done about it? Well site remediation costs
an average of $65,200 per site. Costs vary widely depending on the depth and
type of well. Site remediation on land generally includes:
- Plugging the well. Wells must be plugged to prevent the oil and gas reservoir fluids from migrating uphole over time and possibly contaminating other formations and aquifers. A well is plugged by setting mechanical or cement plugs in the wellbore at specific intervals to prevent fluid flow.
- Removing or burying lease roads and location pads.
- Removing equipment, concrete, trash, and debris.
- Repairing erosion and salt scars on the land.
The states basically struggle with the problem individually,
some more effectively than others. While the cost of remediation has grown due
to more stringent regulations and more complex sites, the amount levied to
finance remediation hasn’t increased significantly in years. Let’s compare how Texas
and Oklahoma deal with their abandoned wells.
Texas
According to the Railroad Commission, which is responsible
for regulating the oil business in Texas, there are currently 186,841 producing
wells in Texas, 78,807 inactive wells, and 33,402 injection wells. This does
not include plugged or abandoned wells. Estimates are there are approximately
10,000 abandoned wells in Texas in need of remediation. The Railroad Commission
is able to remediate about 1,000 sites a year, which is approximately equal to
the rate of abandonment, meaning that the total inventory of abandoned sites
remains pretty constant. This site remediation is financed by a 5/8th
cent surcharge on top of the state’s 4.6% tax on oil production.
Oklahoma
The Oklahoma Energy Resources Board (OERB) is the state
agency that oversees oil well site remediation. It is funded by voluntary
contributions from oil producers and royalty owners which total about 0.1% of oil
and gas sales in the state. To date, the OERB, which has been in existence
since 1993, has remediated approximately 16,000 abandoned wells across the
state at a total cost of $119 million. The OERB reports 800 abandoned wells
that have not been “claimed” by landowners, thus preventing remediation from
commencing.
The OERB also serves an educational function which provides
for “public and student education to teach all Oklahomans about the positive
impact of the petroleum industry,” which probably makes that voluntary tax a
lot more palatable to the oil industry. Very few companies claw back their
contribution.
In Conclusion
In 2015-16, about 50 oil and gas producers in Texas went
belly-up, leaving debt, unemployment, and abandoned wells behind them. Texans are intimately familiar with the
boom-and-bust nature of the oil business. Right now, times are good, and new
wells are being drilled every day. But, as innovation drives green energy
prices down and governments around the world move to mitigate climate change by
reducing or eliminating fossil fuel usage, how long will the good times last?
And who’s going to clean up the mess left behind in the Permian Basin, the
Barnett Shale, and elsewhere around our state? Environmental activists would
love to see those wells stop pumping, but that’s not the end of the story. We’re
already struggling to clean up the detritus of the oil business – how will we
do it when that oil production tax money dries up?
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